Under certain circumstances, the IRS will forgive the tax debt after 10 years. However, that 10-year period may be longer than expected, considering extended suspensions, the IRS tax settlement date compared to your last return, and whether or not you've kept up with your tax returns since the debt period began. When the ten years have passed, the IRS is required to cancel the debt as a bad debt, essentially forgiving it. Whenever the IRS cannot currently collect any payments from you, and whenever you contact the IRS and wait for them to deliberate on your offer of a payment plan, or OIC, the 10-year period for paying your tax debt is interrupted.
Yes, in fact, the period of time that the IRS can collect a tax debt is generally limited to ten years, in accordance with the IRS collection statute of limitations. When your tax debt is currently in a non-collectible state, the IRS will review your situation annually and, if your circumstances do not change, your debt will remain in this state until the statute of limitations expires, at which point the IRS will cancel the remaining balance. For an assessment of the tax debt on a tax return you filed (or on a substitute return that the IRS prepared on your behalf), this is the date the IRS recorded the amount of your taxes due and you can find it in your tax file.
